Executive Viewpoint: Energy expansion rather than transition
Over our company’s 80-year history, numerous shifts have occurred within the energy industry that have shaped energy supply and demand. This includes the 1950s: petroleum became the most used fuel in the U.S.; natural gas heated and powered homes; the first nuclear power plant opened; and the first silicon solar cell capable of generating electric current was developed. In the following decades, the first hydrogen fuel cells (used by NASA) and the first geothermal power plant were created in the 1960s, and wind technology emerged in the 1970s.
During these eight decades, E&P activities moved from vertical to horizontal, onshore to offshore, shallow to deep water and, most recently, to HPHT wells at water depths previously unachievable. In parallel, when oil production was thought to have peaked, the shale revolution unlocked previously inaccessible resources. These milestones demonstrate that the energy industry continues to evolve and multiple sources of energy have been required for many decades. To borrow a phrase from the recent Energy Workforce & Technology Council annual meeting, I believe the changes we’re seeing are an energy “expansion,” not an energy “transition.”
Still the cornerstone. Oil and natural gas will remain an important cornerstone in powering the world, when the sun is not shining, and the wind is not blowing. Petroleum will continue to be utilized in thousands of products used daily, from fuel to wind turbine blades, asphalt to electronics, and fertilizer to medicine. Natural gas, as highlighted by the 2021 Texas freeze, can provide reliable, relatively cheap energy for heating when other sources are not available. Recent global events also re-emphasize the need for U.S. and global energy security and sustainability.
Access to reliable, affordable energy also correlates to economic growth and prosperity, whereas lack of access can contribute to energy poverty, limiting opportunities and hindering aspirations. To satisfy a growing global population, new energy sources must be added, to be layered on top of, not replace, traditional oil and gas for the foreseeable future.
Simultaneously, our industry’s innovation and advances are now being applied to achieve sustainable development of a broad energy mix. The entrepreneurial spirit—pushing the boundaries of what is possible—is now driving reductions in the carbon footprints of existing operations and assets.
E&P advancements are being made, which reduce operational emissions and carbon footprint. New technologies, such as wellsite electrification, e-fracs, greater automation, combining wind and hydrogen to reduce offshore platform generator time, offshore CCUS within existing reservoirs, responsible P&A, decommissioning of older assets, and simple, diligent monitoring of asset integrity, all contribute to more sustainability.
Additionally, efficiency gains in the field help to decrease carbon footprint. Technological advances in equipment and digitalization streamline operations to reduce the amount of equipment, days and people on a job.
Going forward, oil and gas will continue to be vital in the world energy mix, even as alternative energy forms are employed. We are rising to the challenge by supporting the optimized development of traditional sources, while also identifying pathways to a lower-carbon, multi-source energy mix. We demonstrate this commitment through advancing oil and gas technologies, accelerating offshore wind, enabling access to previously inaccessible mineral resources, and applying oil and gas technologies to help achieve reduced carbon objectives.
This year we introduced what is believed to be the first 15K riser system rated for HPHT and sour gas service. This system helps offshore operators tap into shallow-water wells and reservoirs previously avoided using a cost-effective jackup, rather than an expensive semisubmersible.
Simultaneously, we’ve translated our 40+ years of deepwater fixed and floating infrastructure expertise to solve offshore wind challenges. Oil States is a leader in tension leg platform (TLP) mooring systems, having manufactured and installed 95% of them globally. Our OSI Renewables™ business has developed a new patent-pending Fixed Tension Leg Platform, which minimizes levelized cost of energy (LCoE) across the offshore wind life cycle and also resolves limitations with port infrastructure, inland transportation routes, and harbor depth and draft.
We are one of the few suppliers globally that markets wind solutions for shallow-water, bottom-fixed, mid-water, and deepwater installations. Since 2009, we have completed over 50 renewable projects globally.
In addition, we’ve applied traditional oil and gas deepwater technology to develop completely integrated deep-sea mineral gathering systems to access deep-sea mineral resources required to manufacture electric vehicle batteries and other renewable applications.
From subsurface data to verify CCUS projects to leveraging offshore production platform insights, the oil and gas industry offers significant historical experience that greatly informs alternative energy technologies—and is crucial to meeting the world’s growing energy demands. Our goal is to support energy businesses in reducing their carbon footprints on existing traditional oil and gas assets, while also supporting development of new, lower-carbon energy sources.
